Moody's upgrades Linde

Moody's Investors Service said it upgraded the senior unsecured ratings of Linde AG and its rated subsidiaries to Baa1 from Baa2, upgraded the backed subordinated bond to Baa3 from Ba1 and affirmed the Prime-2 short-term rating.

The outlook remains stable.

The agency said that within only six months of the BOC Group plc acquisition closing, Linde was able to sell anti-trust induced assets and non-core activities much faster than originally scheduled. Total proceeds - based on enterprise value - exceeding €7 billion for these disposals have been above Moody's original expectations.

The upgrade reflects the application of the majority of these proceeds to debt reduction - more than €3 billion have already been applied to debt reduction in 2006, and the bulk of remaining proceeds are expected to reduce debt further in the first half of 2007 - as well as the agency's acknowledgement of a swift execution of Linde's disposal program. Moody's expects Linde to continue to apply the outstanding net proceeds for further debt reduction, which will bring the debt-to-EBITDA ratio to an expected level significantly below 4x.

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